Prime Minister Taro Aso is hosting a gathering of experts to explore fresh ideas to revive the economy, aiming to reflect their opinions in additional steps currently being considered by the ruling coalition.
The 83 experts will divide into groups and take part in 10 rounds of intensive discussions through Saturday on themes that include the environment, social security and jobs.
The kickoff meeting Monday in the prime minister’s office was attended by Aso, Chief Cabinet Secretary Takeo Kawamura, Finance Minister Kaoru Yosano and Economy, Trade and Industry Minister Toshihiro Nikai, as well as eight experts, including Richard Koo, chief economist at Nomura Research Institute Ltd.
“The world is in a deflationary recession that is exerting an influence on the real economy,” Aso said at the start of meeting. “We want to hear the opinions of experts from various fields, not just politicians and bureaucrats, and reflect them in our policies.”
Iwao Nakatani, director of Mitsubishi UFJ Research and Consulting Co., proposed raising the 5 percent consumption tax to as high as 20 percent, redistributing some of the revenues to taxpayers and using part to enhance the social safety net, a plan he argues would help rectify the widening disparity between rich and poor.
Many participants, including Koo, highlighted the urgent need to expand domestic demand and employment opportunities, and to make Japan less dependent on exports.
Aso asked the participants how the government could help to stimulate consumption among senior citizens who are hesitant to use their savings.
Ryutaro Kono, chief economist at BNP Paribas Securities (Japan) Ltd., said elderly people are fearful of spending their savings and living without an adequate social security system, which, he said, the government must establish.
Aso told the Liberal Democratic Party-New Komeito ruling bloc last week to compile fresh economic steps to address the economic slump and improve the worsening employment situation.
Immediately after the additional measures are hammered out, the government is expected to compile a supplementary budget for fiscal 2009, which starts April 1, to pay for the measures and submit it to the Diet during the ongoing session through June 3.
Pundits said that with the submission, Aso, whose popularity has plunged, could delay the Lower House dissolution for an election until the extra budget clears the Diet or could move toward a dissolution and seek a popular mandate for the spending package.
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